Sherrod Brown testifies for U.S. steelmakers in trade case

LORAIN — United States Steel Corp.’s Lorain Tubular Operations is among the steel pipe makers losing business because of cheap imports, U.S. Sen. Sherrod Brown said.

On July 15, the U.S. International Trade Commission heard testimony about the steel market and how imported pipes from nine countries are hurting American-made pipes used in gas and oil exploration. The ITC is expected to rule in mid-August on the case.

Brown included U.S. Steel among four Ohio companies, with JMC in Warren, TMK in Brookfield and Vallourec in Youngstown, that could go out of business because of unfair trade practices involving oil country tubular goods, or OCTG pipes.

Two Korean OCTG producers represent the biggest share of imports flooding the U.S. market, but the companies have no domestic market of their own, Brown said.

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“Even though we’re in the middle of a natural gas boom in this country, by some estimates as much as half of the pipe being used to drill for oil and gas is foreign produced,” Brown said.

“This isn’t because American companies don’t make the right products or aren’t competitive,” he said. “It is because foreign companies are trying to put them out of business by engaging in illegal price discrimination in our market.

“If we allow this to go unchecked, the American companies may go out of business,” Brown said.

Industry statistics show that demand for OCTG goods grew by 43 percent between 2010 and 2012, Brown said.

“Unfortunately, domestic producers did not benefit from this increase in demand because they were being shut out of the market by underpriced imports flooding the market,” he said.

Between 2010 and 2012, imports from Korea surged from about 500,000 metric tons to about 800,000 metric tons, Brown said, calling the estimates conservative. Over the same time, the domestic industry operating margin fell from 13.6 percent in 2010 to 9.8 percent in 2012.

The decline in operating margin happened even as the U.S. industry invested millions of dollars in their facilities to remain the most competitive in the global market place, Brown said.

He cited U.S. Steel’s investment of $100 million on a heat and treat and finishing facility that created 100 new full-time jobs in Lorain, along with other investments at the Ohio steel mills.

“I’ve been to each of these factories. I’ve seen the investments they’ve made. I’ve witnessed firsthand how competitive these facilities are, and how much pride the workers have in their products,” Brown said. “I know what is at stake with this case.

“These unfairly traded imports are putting Americans out of work and damaging our steel companies,” he said.

Attorneys for the foreign steel companies have filed briefs arguing the imported pipes are not hurting the U.S. market and steelmakers.

Korean companies including Hyundai USA Inc. also argued the domestic steelmakers have increased capacity to dominate the American market and all but U.S. Steel have overseas affiliates of their own.

The supporters of American steel companies also have ignored steel imports from Canada and Japan, the No. 2 and 3 suppliers to the U.S. market, as well as large suppliers including Germany, Argentina and Mexico, according to a hearing brief from the Korean companies.

U.S. Steel President and Chief Executive Officer Mario Longhi said the company’s leaders are confident the International Trade Commission will rule in favor of the domestic steelmakers.

“We are deeply grateful for the support of our partners at the United Steelworkers, who joined us in testifying today and shared how their members — our employees — have suffered as a result of this surge of unfairly traded products,” Longhi said.